Bob Whitley, president of the U.S.
Tour Operators Association, said, "They're flamboyant. They're
Britney Spears. They're beer-chugging and limbo contests." He
paused, took a sip of wine, then continued. "We're Julie Andrews."
Whitley's "they" were
the cruise lines. His "we" were tour operators. Shortly before
Whitley offered this comparison, I had written -- not for the first
time -- that I thought it odd that tour operators appeared to be
losing the battle for travel agent mind-share to the cruise
industry, whose aggregate revenue was less than half that of the
tour industry. Whitley had asked to meet over lunch to give me his
perspective on the topic.
He didn't disagree
that the organized cruise industry, through CLIA, had an effective
marketing effort aimed at travel agents. "But do we want to run a
trade show like CLIA? I doubt it."
He said that a big
attraction at CLIA's industry show, Cruise3sixty, "is the ship
inspections. We don't have that luxury. We don't have the luxury of
an organization with 22,000 travel agent members. We can't give
away tours in contests like others can give away a seat on an
airplane or a hotel room or a cruise cabin.
"But am I happy with
our relationship with travel agents? Yes. We have great repeat
business from travel agents."
with my supposition that promoting tours as a product was an
apples-to-apples comparison to promoting cruises as a product.
There is likely more difference, he said, between any two tour
experiences than there is between any two cruises, because tour
products are more diversified.
"At a cruise show,
the product is a cruise ... a commodity. But the tour product,
well, there's escorted and there's FIT. It's the Galapagos. It's a
walking tour of Ireland. It's heli-skiing. It's riverboat cruising.
You can't really do one marketing program that covers white-water
rafting, vineyard tours and dive packages.
"And there are really
three types of tour operators," he continued. "There are the large
regional and national operators, about 350 of them, who sell
through travel agents. They are USTOA's focus. There's the
mom-and-pops, about 2,000 of them, selling primarily in their
hometown. And there are the ones focused on their ethnic
communities, packagers for the most part. On the other hand, there
are only about 20 cruise lines, only three major corporations
really, and of those, two are dominant."
While pointing out
the complexities in the tour segment and how it can't be fairly
compared to cruises, Whitley nonetheless found it hard to resist
making comparisons about the advantages of selling tours over
"Terry Dale and I get
along great," he said of CLIA's president and CEO. "I don't want to
do a PR battle, one against the other. But there are some
advantages for travel agents who sell tours. On a tour, the travel
agent makes commissions on the types of things that would be shore
excursions on a cruise. Air, too, of course. But there's enough
business for both of us, especially with baby boomers."
When I again brought
up the topic of marketing tours more aggressively to agents,
Whitley replied that given the challenges posed by the complexities
and diversification of tour products, they had simply chosen a
different marketing path from CLIA's.
$200,000 for marketing. We decided to spend it on PR, aimed at
consumers. Our marketing focus is to tell consumers to take a
packaged vacation and to buy it from a travel agent. With the
weakness of the dollar, they can save 40% over doing it themselves,
and they'll know up front how much the vacation will
I accepted that the
diversity of the tour industry was a disadvantage, but nothing
Whitley said had really convinced me that tours could not be
promoted more aggressively in a cohesive and coherent way by his
organization, similar to CLIA's effort. When I heard the budget
number of $200,000, though, I had to ask: Can't a $28 billion
industry segment come up with more than that to promote
"Consider that our
margins are about 1% to 3%," Whitley said.
Ahhhh. Say no more,
Bob. Given that the cruise industry's operating margin averages
better than 19%, the fact that the tour industry has twice the
sales volume of cruising is suddenly irrelevant. In terms of
available cash for marketing, the cruise lines begin with a pile of
cash that's approximately five times larger. The two efforts are
not apples-to-apples; they're the cruise ship's apple to the tour
industry's bunch of grapes.
I sat down to that
lunch wondering why an industry segment appeared to be dwarfed in a
marketing battle against a segment half its size. As dessert
arrived, I finally understood.